The Supreme Court (SC) on Tuesday dominated that the Benami law can solely be applied prospectively and never retrospectively, and held part 3(2) of the Act “unconstitutional”.
Several companies have been awaiting this verdict on the Benami Transactions (Prohibition) Amendment Act, which got here into impact on November 1, 2016.
The apex court docket held that there may be solely potential impact of the 2016 Act and, thus, all of the actions taken earlier than the modification are put aside.
Section 3 of the Act, which the court docket held “unconstitutional”, says any one that enters into any benami transaction shall be punishable with imprisonment for a time period which can prolong to a few years or with effective or with each.
The Bench, led by Chief Justice of India NV Ramana, delivered the judgment following a plea most well-liked by the Centre in opposition to a Calcutta High Court order holding that the 2016 Amendment Act was potential in nature. The copy of the judgment is awaited.
The new Act expanded the definition of the transactions categorised as benami and imposed stiff penalties that put many companies and people beneath the scanner because it had been used retrospectively.
The tax division had issued hundreds of notices for money transfers, property offers for earlier intervals beneath the law.